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Lake v. Ohana Military Communities, LLC

United States District Court, D. Hawaii

May 31, 2018

KENNETH LAKE, CRYSTAL LAKE, HAROLD BEAN, MELINDA BEAN, KYLE PAHONA, ESTEL PAHONA, TIMOTHY MOSELEY, ASHLEY MOSELEY, RYAN WILSON, and HEATHER WILSON Plaintiffs,
v.
OHANA MILITARY COMMUNITIES, LLC, FOREST CITY RESIDENTIAL MANAGEMENT, INC.; and DOE DEFENDANTS 1-10, Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS AND/OR STRIKE PLAINTIFFS' FIRST AMENDED COMPLAINT [DKT 75]

          LESLIE E. KOBAYASHI, UNITED STATES DISTRICT JUDGE

         On October 4, 2017, Defendants Ohana Military Communities, LLC (“Ohana”) and Forest City Residential Management, LLC (“Forest City” and collectively, “Defendants”) filed their Motion to Dismiss and/or Strike Plaintiffs' First Amended Complaint [Dkt 75] (“Motion”).[1] [Dkt. no. 76.] Plaintiffs Kenneth Lake, Crystal Lake, Harold Bean, Melinda Bean, Kyle Pahona, Estel Pahona, Timothy Moseley, Ashley Moseley, Ryan Wilson, and Heather Wilson (“Plaintiffs”) filed their memorandum in opposition on December 13, 2017, and Defendants filed their reply on December 20, 2017. [Dkt. nos. 79, 82.] The Court finds this matter suitable for disposition without a hearing pursuant to Rule LR7.2(d) of the Local Rules of Practice of the United States District Court for the District of Hawai`i (“Local Rules”). Defendants' Motion is hereby granted in part and denied in part for the reasons set forth below. Specifically, the Motion is granted insofar as: Plaintiffs' unfair and deceptive acts or practices (“UDAP”) claim and unfair methods of competition (“UMOC”) claim are stricken; Plaintiffs' claim that Defendant breached the landlord tenant code by failing to comply with the applicable building codes and housing laws is dismissed with prejudice; Plaintiffs Harold Bean and Melinda Bean's (“the Beans”) nuisance claim is dismissed with prejudice; and Plaintiffs Timothy Moseley and Ashley Moseley's (“the Moseleys”) nuisance claim is dismissed with prejudice. The Motion is denied in all other respects.

         BACKGROUND

         Plaintiffs filed their Complaint in state court on September 14, 2016. Defendants filed its Notice of Removal on October 13, 2016. [Dkt. no. 1.] The factual allegations of the Complaint are summarized in this Court's August 1, 2017 Order Granting in Part and Denying in Part Defendants' Motion to Dismiss (“8/1/17 Order”). [Dkt. no. 63.[2]]

         The Complaint alleged the following claims: breach of contract against Ohana (“Count I”); breach of the implied warranty of habitability against Ohana (“Count II”); a claim against Defendants for violation of the Landlord Tenant Code, Haw. Rev. Stat. Chapter 521 (“Chapter 521” and “Count III”); an unfair and deceptive trade practices (“UDAP”) claim against Defendants pursuant to Haw. Rev. Stat. § 480-2 (“Count IV”); a negligent failure to warn claim against Defendants (“Count V”); a claim against Defendants for negligent infliction of emotional distress (“NIED”) and intentional infliction of emotional distress (“IIED” and “Count VI”); a fraud claim against Defendants (“Count VII”); a negligent misrepresentation claim against Defendants (“Count VIII”); an unfair competition claim (“UMOC”) against Defendants pursuant to § 480-2(a) (“Count IX”); a trespass claim against Defendants (“Count X”); and a nuisance claim against Defendants (“Count XI”).

         The 8/1/17 Order dismissed Counts IV, IX, and X with prejudice, and dismissed all of the remaining claims without prejudice. 2017 WL 4563079, at *12. On reconsideration, the dismissal of Count X was changed to a dismissal without prejudice to the filing of a motion seeking leave to file a second amended complaint alleging a revised trespass claim. [Order Granting in Part and Denying in Part Pltfs.' Motion for Reconsideration of Order Granting in Part and Denying in Party Defs.' Motion to Dismiss, filed 10/12/17 (dkt. no. 78) (“10/12/17 Order”), at 8.[3]]

         Plaintiffs filed their First Amended Complaint on September 20, 2017. [Dkt. no. 75.] Plaintiffs Ryan and Heather Wilson (“the Wilsons”) were added to the caption. [First Amended Complaint at pg. 1.] The Wilsons were not listed on the docket sheet as plaintiffs because they were not included in the caption of the original Complaint, but they were included in the Complaint's section identifying the parties. [Notice of Removal, Decl. of Christine A. Terada, Exh. 1 (Complaint) at pg. 1 & ¶ 154.] The most relevant new factual allegations in the First Amended Complaint are summarized below:

-identification of the specific addresses at Kaneohe Marine Corp Base Hawaii (“MCBH”) where Plaintiffs currently reside (Plaintiffs Kyle and Estel Pahona (“the Pahonas”)) or previously resided (all other Plaintiffs); [First Amended Complaint at ¶¶ 6-10;]
-general allegations that Plaintiffs and their families routinely traveled to and visited different neighborhoods in MCBH, and therefore even Plaintiffs who did not live within MCBH neighborhoods where the soil was allegedly contaminated were exposed to the contaminants during those visits and travels; and Plaintiffs whose homes were not contaminated were exposed to contaminated construction dust if their homes were near remediation sites; [id. at ¶¶ 37-38;]
-allegations regarding how each of Plaintiffs' families “observed and were routinely exposed to dust and dirt from the demolition and construction of homes at MCBH”; [id. at ¶¶ 39-39.e, 43;]
-allegations that Plaintiffs generally observed construction dust blowing from MCBH construction sites and experienced construction dust settling on the exterior and interior of their homes, vehicles, and other possessions; [id. at ¶¶ 40-43;]
-allegations that the construction dust required Plaintiffs to spend additional time cleaning their homes and personal property and to purchase additional cleaning supplies and air filtration products; [id. at ¶¶ 41-44;]
-allegations that the constant construction dust prevented Plaintiffs from using and enjoying their homes and their communities to the extent they would have done without the dust; [id. at ¶ 45;]
-allegations that, before entering into their leases, Plaintiffs were never told that: residential neighborhoods at MCBH had soil and construction dust that were contaminated with pesticides; Ohana adopted a Pesticide Soils Management Plan (“Soil Plan”) to address the pesticide contamination at MCBH; [id. at ¶¶ 46-47;] Ohana “was creating pesticide-contaminated landfills below ‘new' neighborhoods it was leasing to military families”; [id. at ¶ 48;] they should take precautions to avoid or minimize contact with soil, dirt, and dust at MCBH; and Plaintiffs' families would be exposed to increased risks of cancer and other health outcomes; [id. at ¶¶ 49-50;]
-allegations that, had Defendants properly informed them about the above, Plaintiffs would not have chosen to live at MCBH; [id. at ¶¶ 52-55;] further, because of these conditions and because of the failure to disclose, Defendants charged Plaintiffs more for their rental homes at MCBH than Defendants would have been able to charge if proper disclosures had been made; [id. at ¶ 56;]
-allegations that, because Defendants did not warn Plaintiffs about the risks, Plaintiffs, their families, and pets came in contact with dust, dirt, and soil in MCBH without taking necessary precautions; [id. at ¶ 51;] and -allegations that, because of Defendants' actions, “Plaintiffs are extremely concerned, fearful, and worried that they and their families have been exposed to dangerous chemicals and higher rates of adverse health outcomes while living at MCBH for themselves and their families” and they believe they have been denied “the MCBH community they were promised by Defendants, ” [id. at ¶¶ 57-58].

         The First Amended Complaint alleges the same claims as the original Complaint: breach of contract against Ohana (“Amended Count I”); breach of the implied warranty of habitability against Ohana (“Amended Count II”); a Chapter 521 claim against Defendants (“Amended Count III”); a UDAP claim against Defendants (“Amended Count IV”); a negligent failure to warn claim against Defendants (“Amended Count V”); an NIED claim and an IIED claim against Defendants (“Amended Count VI”); a fraud claim against Defendants (“Amended Count VII”); a negligent misrepresentation claim against Defendants (“Amended Count VIII”); a UMOC claim against Defendants (“Amended Count IX”); a trespass claim against Defendants (“Amended Count X”); and a nuisance claim against Defendants (“Amended Count XI”).

         Amended Counts IV and IX were improperly included in the First Amended Complaint because Plaintiffs' UDAP and UMOC claims have already been dismissed with prejudice. Amended Counts IV and IX are therefore stricken.

         On December 20, 2017, this Court issued an order striking Amended Count X because Plaintiffs failed to file a motion seeking leave to plead a revised trespass claim. [Dkt. no. 81.] On February 28, 2018, Plaintiffs filed a motion seeking leave to amend the First Amended Complaint to add a trespass claim, but the magistrate judge denied the motion in an order issued on April 17, 2018. [Dkt. nos. 90, 97.] Plaintiffs did not appeal the magistrate judge's order to this Court.

         Only Amended Counts I, II, III, V, VI, VII, VIII, and XI will be addressed in this Order. The relevant portions of the new factual allegations, as well as more detailed discussion of Plaintiffs' damages, have been added to each Amended Count. See, e.g., First Amended Complaint at ¶¶ 65-66 (Amended Count I), ¶¶ 72-74 (Amended Count II), ¶ 82 (Amended Count III), ¶¶ 98, 102 (Amended Count V), ¶¶ 112-13 (Amended Count VI), ¶¶ 112, 117-18 (first of two) (Amended Count VII), [4] ¶¶ 130, 135 (Amended Count VIII), ¶¶ 160-61, 163 (Amended Count XI).

         In the instant Motion, Defendants argue the additional factual allegations in the First Amended Complaint are insufficient to cure: the standing defect identified in the 8/1/17 Order; and the defects in Plaintiffs' claims that Defendants identified in the Original Motion to Dismiss but were not addressed in the 8/1/17 Order. Defendants urge this Court to dismiss all of Plaintiffs' remaining claims with prejudice.

         DISCUSSION

         I. Standing

         In the 8/1/17 Order, this Court stated:

As to every remaining claim, each Plaintiff must plead sufficient factual content to draw the reasonable inference that he or she suffered an actual injury in fact - or faces an imminent injury - that is fairly traceable to Defendants' alleged actions and omissions, and that is likely to be redressed by a judgment in his or her favor.
Plaintiffs have pled some factual allegations regarding soil contamination and construction dust at MCBH in general, but they have not pled sufficient factual allegations to allow this Court to draw the reasonable inference that each Plaintiff has suffered, or is imminently facing, an actionable injury. This Court therefore concludes that Counts I, II, III, V, VI, VII, VIII, and XI fail to state plausible claims for relief because Plaintiffs have not pled sufficient allegations regarding their standing to pursue these claims. . . .

2017 WL 4563079, at *12 (citations omitted).

         The First Amended Complaint alleges all Plaintiffs experienced construction dust at MCBH settling on their rental homes, their persons, and/or their personal property, including during Plaintiffs' routine travels and visits to parts of MCBH beyond the immediate areas of their rental homes. This dust allegedly: caused Plaintiffs to spend additional time cleaning their homes and personal property; caused them to spend additional resources on cleaning and air filtration supplies; and prevented them from using and enjoying their homes and the MCBH community as they would have without the dust. [First Amended Complaint at ¶¶ 39-45.] Plaintiffs allege Defendants now admit some of the MCBH neighborhoods “contained homes and soils contaminated by pesticides and other contaminants (asbestos, lead-based paint, extensive mold infestation, and other toxins).” [Id. at ¶ 38.] Plaintiffs allege all of them either lived in these “contaminated” neighborhoods or were regularly exposed to those neighborhoods because their daily lives involved regular travel “between MCBH neighborhoods on their way to various destinations.” [Id. at ¶¶ 37-38.] Further, Plaintiffs assert that, before they entered into their leases for their MCBH homes, they were not told about pesticide-contaminated soil and construction dust in the MCBH residential neighborhoods. [Id. at ΒΆ 46.] They state that, if they had been told about the contamination, ...


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